Colombia central bank still divided on rate -minutes

BOGOTA, Sept 4 (Reuters) - Policymakers on Colombia's
central bank board continue to be divided on whether to hold the
benchmark interest rate amid slowing growth or to raise it to
head off inflationary pressures, according to minutes released
on Friday.

The seven policymakers have kept the country's key lending
rate at 4.5 percent for 12 straight months as they weigh
lower-than-predicted economic expansion against the risks of
rising inflation.

Minutes for the August meeting showed that some members
favored a hold in the rate because they think that falling
growth may eventually help reduce inflation back down to within
the bank's target range of 2 to 4 percent.

Another group also favored holding the rate at least until
more information about lower growth is available, so they can
"better balance the risks of higher inflation and excessive
adjustment of economic growth."

But other members favored raising borrowing costs by 25
basis points to control inflation, which has been above the
target range since March, the minutes said.

"In their view, a 25 basis points increase would contribute
to prevent expectations from becoming unanchored," the minutes
said.

The tone of the minutes was more moderate than those from
July, when some policymakers argued that though inflation
worries could perhaps be tamed by a preventative raise in the
rate, there was also a danger that the economy would grow less
than expected.

According to analysts polled by Reuters, a majority of the
board are inclined to raise the rate sooner rather than later to
counter the uptick in inflation.

Consumer price figures for August will be released on
Saturday. In July 12-month inflation reached 4.46 percent.

The board will next meet on Sept. 25.
(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb;
Editing by Chizu Nomiyama)